The US inflation in April was slightly weaker than forecasted, reinforcing hopes that the Federal Reserve's interest rate hikes are getting price rise under control.
The consumer price inflation reading came in at 4.9 per cent, which was lower than the 5 per cent prediction by analysts surveyed by Dow Jones. This is also the lowest level in the last two years. In accordance with the expectations, the monthly inflation rate rose by 0.4%. Though lower than expected, the inflation rate is still far higher than the US Federal Reserve's target of 2%.
Core inflation
The core inflation which focuses more on volatile food and energy costs also dipped slightly in April to 5.5 per cent after being stubbornly high for the past few months.
Food prices
Food prices were also unchanged for a second straight month. The grocery store prices also saw a dip of 0.2 per cent after it fell 0.3 per cent in March, posting a back-to-back decline for the first time since July 2019. Even the cost of fruits, vegetables, fish, eggs and meat have seen a fall in comparison to March.
Other commodities like milk, natural gas and electricity have also gone down in April.
Data on producer prices and initial jobless claims to be released today
The US will also release statistics on producer prices and initial jobless claims on Thursday, which may confirm previous indications of a deteriorating labour market and easing wage inflationary pressures.
According to the CME FedWatch tool, about 90.3% of Fed fund futures traders are expecting the Federal Reserve to keep the rates unchanged at its upcoming policy meeting in June, while the rest see a 25-basis-point hike.
With input from Agencies
